“It’s just a question now of how fast we can rise out of here. And that will be dependent on exports and the consumers. But we’re not putting a lot of weight on the consumer this time around.

“The economy was knocked flat and we’re up on our knees right now. We’re hoping to get up on one foot before we stand up here. After all, this has been the worst economic cycle we’ve seen since World War II or even the Great Depression.”

So don’t expect “rocket” growth any time in the near future, he warns.

Moreover, it may take at least a year or so to regain the 135,000 jobs that were lost in Wisconsin over the past two years.

Even in this recession, Winters stresses, Wisconsin is creating 130,000 jobs each quarter.

“It’s just that we are laying more people off than that to the tune of 40,000 jobs a quarter and that accumulates. There is a natural churn, but in recessions, losing jobs more than offsets new employment.”

But he says there are positive trends.

Among those trends, he cites rising home sales, improved industrial production and increasing factory orders, indicators which often lead a recovery “and are showing us some glimmers of hope.”

In Fed parlance, he calls these positive signs “green shoots that are getting a little higher, but we are still way below levels for all of these things that we were back in the pre-recessionary period.”

As confidence grows, Winters predicts more loans will be extended and the cash that “greases” the economy will flow as the credit markets function better again.

Though inventories are still being drawn down, he says orders are rising from both Europe and Asia, where some countries’ economies are rebounding. Domestic demand is up in some areas, too, he notes. That all contributes to factories stepping up production.

He says Wisconsin’s economy will improve with the nation’s. And he predicts that Wisconsin’s manufacturing base will gain with exports of mining, manufacturing and other heavy equipment to growing economies such as India and China.

Of the 135,000 jobs that have disappeared during the past two years, he says the majority were in manufacturing and construction.

“We’ve lost some 57,000 manufacturing jobs through this cycle and the construction job losses pretty much started this thing back in ’06 when the housing market started to turn,” he says.

“So it will take a while for those particular sectors to climb out,” he says.

But the health care industry -- which has gained 5,000 jobs since July of 2008 -- continues to improve because of increasing demand, fueled partly by better technology and an aging population.

Though consumer spending has fueled economic expansion over the past few decades, he says he does not see that as the big driver for this recovery.

“That’s because of the wealth destruction we’ve seen with people’s home values and portfolios falling. At one point, we were making money hand over fist with our homes and in our stock portfolios. We didn’t have to save because that was all being taken care of.”

Now, however, the reverse is true as Americans are trying to be more frugal and have begun saving again as they look toward a still uncertain future.

The key to this recovery will come from exports and increased capital investments here in the United States, Winters says.

Winters said China invested heavily in a stimulus package that was roughly 2.5 times greater, in GDP terms, great than the U.S. effort. It was directed to both capital investment and consumption.

“It’s carrying through, so they are attracting imports from local Asian companies and now even some from the U.S. and Europe on the manufacturing side so they can help build their economies.”

That means everything from large equipment for construction on down to electrical and mechanical gear to make consumer goods.

“A lot of the world, this time around, is looking for China to help pull us out of this depression that we are in globally,” he says.

As China’s economy grows and its population becomes wealthier, he says it will import more consumer goods.

“We have been after them for some time to save less and buy more. They’ve been after us to buy less and save more, so it’s kind of a conflict we have there.

“But China’s economy is about 30 percent imports and 30 percent exports, so they do a lot of trade. If we can get their consumers to take on more, obviously that’s a lot of people for markets for goods.”

He says he's waiting to see what kind of success Harley-Davidson has pushing its motorcycles into China and India.

“Other kinds of things they will be buying from Wisconsin, though, are large capital equipment such as bulldozers and cranes for infrastructure projects,” he says.

Though Winters says there is little chance that the economy will fall into another recession soon, he worries what will happen when incentives used to stimulate the economy play out.

The question, he wonders, is “if we will have enough momentum in the economy to take it forward. We will see when the time comes. And there is concern out there about inflation with all this cash out there.”

But he says dampened oil prices, excess labor and production capacity may keep inflation under control for the near term.